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On
Assessing Employee Turnover In Case Of a Company
Course code: MBA-601
Course Title: Strategic Management
Submitted to:
Chowdhury Abdullah- Al- Mamun, Assistant Professor
Department of Business Studies (UITS)
University of Information Technology & Sciences
Submitted by:
Name: ID:
Anwar Hossain 16202531
Mehedi Hassan 16202507
S.M. Lutfar Rahman 16202541
Md. Rehan Uddin 16202504
Md.Rabiul Islam 16202503
To,
Dear Sir,
It is indeed a great pleasure for us to able to hand over the result of our hardship of the report on
Assessing Employee Turnover in case of a Company. This report is the result of the knowledge
which has been acquired from the respective course .We tried our level best for preparing this
report. The information of this report is mainly based on Assessing Employee Turnover in case
of a Company. Some other details were gathered from the Organization personnel of that
company. All of us gave our hundred percent for making this report come together.
We, fervently hope that you will find plan worth reading. Please feel free for any query or
clarification that you would like us to explain. Hope you will appreciate our hard work and excuse
the minor errors.
These expenses of staff turnover facing organizations include the cost of training and
development, loss of efficiency, new hires and customer retention. Depending on the industry,
and the job role, the annual wages and salaries range between 30-200% of a single employer
(Trevor,W. (2004). This is more impactful on the lower paying jobs and they tend to cost
companies less per replacement of an employee than do higher paying job roles. However, they
incur the cost more often. For these reasons, most companies focus on employee retention
strategies regardless of pay levels (McClelland, 2003).
According to Oregon (2004) most companies find that employee turnover can be reduced when
issues affecting employees morale are addressed. This is mainly through offering employees
benefits such as reasonable flexibility with work and family balance, performance reviews, and
performance based incentives, along with traditional benefits such as paid holidays or sick days
(Murphy, 2009). The extent to which a company will go to in order to retain employees depends
not only on employee replacement costs, but also on overall performance of the company
(Phillip, 2009). If a company is not getting the performance it is paying for, replacement cost can
be an enormous price to pay in the long run (Bratton, 2003).
According to Blahna (2005) high turnover can be a serious obstacle to organizational efficiency,
quality, and profitability of firms of all sizes. For the smallest of companies, a high turnover rate
can mean that simply having enough staff to fulfill daily functions is a challenge, even beyond
the issue of how well the work is done when staff is available (Richard, 2008). Turnover is no
less a problem for major companies, which often spend millions of dollars a year on turnover
related costs (Miller, 2006). For service-oriented professions, such as management consulting or
account management, high employee turnover can also lead to customer dissatisfaction and
turnover, as clients feel little attachment to a revolving contact (Brian,2009). Customers are also
likely to experience dips in the quality of service each time their representative changes
(Miller,2006).
The high-performance company focused on innovative services and products cannot tolerate
high turnover of employees. The organization develops the know-how and teaches employees the
corporate culture. It invests in the development of the sustainable competitive advantage. The
low retention of employees undermines the effort of the leadership team to make the company
lean, profitable and agile.
Human Resources should set retention goals and objectives in following areas:
The retention strategy is a core driver for the retention policy in the company. The leadership
team is the owner of the document, and Human Resources has to measure the progress, failures,
and successes. Human Resources cannot be the owner of the strategy because it is the leadership
team who needs to protect and retain employees. The team has to carry costs. However, they
want proposals from Human Resources; they need the proper market mapping and regular
evaluation of best practices available. This is the right goal for HR.
An excellent retention plan is always a critical success factor. Human Resources cannot develop
just one plan because each group of employees has different needs and requirements. HR should
always design at least two or three alternatives the employee can choose from. However, HR
should also prepare several levels of programs so that the employee can earn a higher retention
status. HR should construct plans together with managers and employees. The leadership team
has to approve them. This is the goal for Human Resources.The retention program is based on
nominations and a limited number of seats. Human Resources has to design and manage the
appointment program that is fair and gives balanced chances to all line managers. There should
be an explicit list of key job roles and just employees from the list should be allowed to enter the
program. However, the leadership team should receive several wildcards to include other key
employees. However, rules should be known to everyone in the organization. HR is a gatekeeper,
and it has to play the role fair.
Finally, the retention program has to be measured. HR has to measure the performance of the
retention plan. HR has to measure a difference in the turnover, the development of the attrition
and the satisfaction of employees in the program. HR has to make sure that the retention strategy
has a real impact on the business performance.
Organizations invest a lot on their employees in terms of induction and training, developing,
maintaining and retaining them in their organization. Therefore, managers at all costs must
minimize employees turnover. Although, there is no standard framework for understanding the
employees turnover process as whole, a wide range of factors have been found useful in
interpreting employee turnover Kevin et al.(2004). Therefore, there is need to develop a fuller
understanding of the employee turnover, more especially, the sources what determines employee
turnover, effects and strategies that managers can put in place minimize turnover. With
globalization which is heightening competition, organizations must continue to develop tangible
products and provide services which are based on strategies created by employees. These
employees are extremely crucial to the organization since their value to the organization is
essentially intangible and not easily replicated Meaghan et al. (2002). Therefore, managers must
recognize that employees as major contributors to the efficient achievement of the organizations
success Abbasi et al. (2000). Managers should control employee turnover for the benefit of the
organization success. The literature on employee turnover is divided into three groupings:
sources of employee turnover, effects of turnover and the strategies to minimize turnover.
Employees turnover is a much studied phenomenon Shaw et al. (1998).But there is no standard
reason why people leave organization. Employee turnover is the rotation of workers around the
labour market; between firms, jobs and occupations; and between the states of employment and
unemployment Abassi et al. (2000). The term turnover is defined by Price (1977) as: the ratio
of the number of organizational members who have left during the period being considered
divided by the average number of people in that organization during the period. Frequently,
managers refer to turnover as the entire process associated with filling a vacancy: Each time a
position is vacated, either voluntarily or involuntarily, a new employee must be hired and trained.
This replacement cycle is known as turnover Woods, (1995). This term is also often utilized in
efforts to measure relationships of employees in an organization as they leave, regardless of
reason. Unfolding model of voluntary turnover represents a divergence from traditional
thinking (Hom and Griffeth, 1995) by focusing more on the decisional aspect of employee
turnover, in other words, showing instances of voluntary turnover as decisions to quit. Indeed,
the model is based on a theory of decision making, image theory Beach, (1990).
Recommendation
Reducing employee turnover is dependent on the total work environment you offer for
employees. Employees thrive when the work environment supports them in attaining their goals
and dreams. The best employees for your organization share your vision and values about what
they want to experience at work.
These recommendations about reducing employee turnover are also common-sense, basic and
incredibly hard to find in organizations today. Wonder why this is so? It's because many
organizations have not figured out that valuing employees is a win-win for employers and
employees.
Select the right people in the first place through behavior-based testing and competency
screening. Sure, an onsite interview gives you a feel for whether the person can fit within
your culture, but your key to selecting the best employees is to determine how well they
can do the job. The right person, in the right seat, on the right bus is the starting point.
At the same time, don't neglect to hire people with the innate talent, ability, and smarts to
work in almost any position even if you don't currently have the best match available.
Hire the smartest people you can find to reduce employee turnovertheir versatility will
make them exceptional contributors. You just need to make sure that they are not bored
doing the same old thing. Think job enrichment and promotions.
Provide opportunities for people to share their knowledge on-the-job via training
sessions, presentations, mentoring others and team assignments. Employees like to share
what they know; the act of teaching others ensures the employee's own learning. Training
others is the best indicator of learning.
Demonstrate respect for employees at all times. Listen to them deeply; use their ideas;
never ridicule or shame them. Via your communication, share that you value them.
Offer performance feedback and praise good efforts and results to reduce employee
turnover. Your recognition of employee contributions is your most powerful form of
employee reinforcement and retention. People want to know that their work makes a
difference.
People want to enjoy their work. Make work fun. Engage and employ the special talents
of each individual. A day without laughter should be abnormal.
Enable employees to balance work and life. Allow flexible starting times, core business
hours and flexible ending times. (Yes, his son's soccer game is as important as work.)
Involve employees in decisions that affect their jobs and the overall direction of the
company whenever possible. Involve them in the discussion about company vision,
mission, values, and goals. This strategic framework will never live for them or become
owned by them if they merely read it in email or hanging on the wall.
Base the upside of bonus potential on the success of both the employee and the company
and make it limitless within company parameters. (As an example, pay 10% of corporate
profits to employees.)
Recognize and celebrate success. Mark their passage as important goals are achieved.
Bring in pizza or breakfast to celebrate reaching milestones and turn the occasion into a
brief ceremony while you celebrate success.
Staff adequately so overtime is minimized for those who don't want it and people don't
wear themselves out. You will discover that salaried employees who are engaged and
excited will work the hours necessary to get their jobs done.
Nurture and celebrate organization traditions. Have a costume party every Halloween.
Run a food collection drive every November. Pick a monthly charity to help. Have an
annual company dinner at a fancy hotel.
Provide opportunities within the company for cross-training and career progression.
People like to know that they have room for career movement. This is a serious deterrent
to employee turnover.
Provide the opportunity for career and personal growth through training and education,
challenging assignments and more responsibility.
Communicate goals, roles, and responsibilities so that people know what is expected and
they feel like part of the in-crowd.
Therefore, if the above strategies are taken into account the business would be able to survive in
a dynamic environment by treating their employees as one of their assets which needs a lot of
attention. Employees are the backbone of any business success and therefore, they need to be
motivated and maintained in organisation at all cost to aid the organisation to be globally
competitive in terms of providing quality products and services to the society. And in the long-
run the returns on investments on the employees would be achieved. Management should
encourage job redesign-task autonomy, task significance and task identity, open book
management, empowerment of employees, recruitment and selection must be done scientifically
with the objective of retaining employees. Managers should examine the sources of employee
turnover and recommend the best approach to fill the gap of the source, so that they can be in a
position to retain employees in their organisation to enhance their competitiveness in the this
world of globalization. Managers must understand that employees in their organizations must be
treated as the most liquid assets of the organisation which would make the organisation to
withstand the waves of globalization. This asset needs to be monitored with due care, otherwise
their organizations would cease to exist. Employees should be given challenging work and all
managers should be hired on the basis of know how by following laid down procedures of the
organisation and this would make organisation to have competent managers at all levels of
management and hence good supervision noted pay and payrelated variables have a great effect
on employee turnover. Management must compensate employees adequately. They should pay
employees based on their performance and in addition they should given employees incentives
like individual bonus, lump sum bonus, sharing of profits and other benefits. Hence, if these are
put in place they would minimize employee turnover.
Reference
1. Al Mamun CA& Hasan MN(2017). Factor affecting employee turnover and
sound retention strategies in business organization problems and perpaction in
management 15(1), 63-71.
2. www.recruiter.com
3. Turnover-State of Oklahoma Website. Retrieved from www.ok.gov:
http://www.ok.gov/opm/documents/Employee%20Turnover%20Presentation.ppt
4. Beam, J. (2014, December 25). What is Employee Turnover? Retrieved from
WiseGeek: http://www.wisegeek.org/what-is-employee-turnover.htm
5. The True Costs of Turnover http://www.insightlink.com/blog/calculating-the-cost-
of-employee-turnover.cfm